Page 16 - The Atlas of Economic Complexity

“chemists” – five types of artists, and eight kinds of design- cure the fabric, cut it, sew it, pack it, brand it, market it and
ers. We can all imagine a much more nuanced classification distribute it. In a firm that manufactures shirts, expertise
in our respective fields. For instance, we could distinguish in each of these knowledge chunks will be held by differ-
between economists that specialize in labor, trade, finance, ent people. And shirts require all of them. Moreover, you
development, industrial organization, macro and econo- need to finance the operation, hire the relevant people, co-
metrics, among others. If we did this further disaggrega- ordinate all the activities and negotiate everybody’s buy-in,
tion for all occupations, we would easily go into the tens which in itself require different kinds of knowhow. We can
of thousands. The only way that society can hold all of the say that putting together this operation requires know-who
knowledge we have is by distributing coherent pieces of it and know-where. Know-who can be thought of as knowl-
among individuals. It is the way the world adapts to expand- edge of who has the requisite chunks of knowledge, and
ing knowledge. know-where as knowledge of where the people and orga-
Most products, however, require more knowledge than nizations that have this knowledge are located. To make
can be mastered by any individual. Hence, those products shirts, you can import the fabric and access the knowledge
require that individuals with different capabilities interact. about looms and threading that is embedded in a piece of
Assume that a person has the capacity to hold an amount of cloth. Yet some of the knowledge required cannot be acce-
tacit knowledge equal to one personbyte. How can you make ssed through shipped inputs. The people with the relevant
a product that requires 100 different personbytes? Obvious- knowledge must be near the place where shirts are made.
ly, it cannot be made by a micro-entrepreneur working on In fact, just as knowhow is modularized in people in the
her own. It has to be made either by an organization with at form of individual capabilities, larger amounts of knowhow
least 100 individuals (with a different personbyte each), or are modularized in organizations, and networks of organi-
by a network of organizations that can aggregate these 100 zations, as organizational or collective capabilities. For ex-
personbytes of knowledge. How can a society hold a kilo-, ample, to operate a garment plant you need power and wa-
mega- or giga-personbyte? Only through a deep division of ter. You need to be able to move raw materials in and ship
labor, in which individuals become experts in small pieces the final product out. Workers need access to urban trans-
of the available knowledge and then aggregate their person- portation, day care centers and health facilities. To be able
bytes into peoplebytes through organizations and markets. to operate, the plant manager needs all of these services to
For example, to make a shirt you need to design it, pro- be locally available. This implies that others must be aggre-